Property industry reacts to latest Nationwide House Price Index

The price of a typical home in the UK has exceeded £250,00 for the first time, according to Nationwide.

The average property price in October was £250,311, marking a 9.9% annual increase and a 0.7% month-on-month uplift, the index shows.

But Nationwide cautioned that the threat of base rate hikes from the Bank of England was pushing up mortgage rates and this could dent the property market.

Robert Gardner, Nationwide’s chief economist, said: “Demand for homes has remained strong, despite the expiry of the stamp duty holiday at the end of September.

“Indeed, mortgage applications remained robust at 72,645 in September, more than 10% above the monthly average recorded in 2019.

“However, a number of factors suggest the pace of activity may slow. Consumer confidence has weakened in recent months, partly as a result of a sharp increase in the cost of living.

“Even if wider economic conditions continue to improve, rising interest rates may exert a cooling influence on the market, though the impact on existing borrowers is likely to be modest.”

Industry reaction:

Iain McKenzie, CEO of The Guild of Property Professionals, said: “It was business as usual for the property market in October, with the ending of the stamp duty holiday having little obvious effect.

“It’s telling that mortgage applications in September were higher than the same time two years ago, indicating that buyers are still keen to move.

“The growth in prices is driven by the demand for housing, coupled with a shortage of stock on the market. That is unlikely to change soon, although there may be some slowdown in activity as we go deeper into winter.

“Months of continued house price growth mean the average family home now costs a quarter of a million pounds. In November 2011, the average house cost £167,757, meaning that prices have risen by half in ten years.

“While the labour market remains strong, most families will feel secure enough to take on a mortgage, although any future interest rate rise could deter people.

“We’re expecting a busy time in the lead up to Christmas, which is traditionally a hectic period for estate agents, as prospective buyers hope to move into their new home in time for the festivities.”


Nicky Stevenson, managing director at Fine & Country, commented: “Finally, we are getting our first glimpse of what the housing market might look like now the stamp duty holiday has ended.

“Momentum remains almost unchanged despite many predicting more subdued growth and an end to the giant spikes witnessed earlier in the year.

“What is clear is that the appetite among buyers remains as strong as ever and so far the expiry of the stamp duty holiday has had no visible impact on demand.

“The Bank of England’s Monetary Policy Committee takes centre stage as the country braces itself for its first interest rate hike since 2007.

“The boom was powered in part by record low borrowing costs as well as the Chancellor’s tax incentives but already we are seeing high street lenders bump up their rates in anticipation of a Bank of England hike, something which may cause house price growth to dampen.

“Most expect interest rate rises to be incremental so as not to choke off economic recovery, and it may well present opportunities for buyers looking to negotiate on price.

“The dynamics of the housing market may be about to shift slowly once again, but make no mistake, the boom still isn’t over.”


Jonathan Hopper, CEO of Garrington Property Finders, remarked: “A boom that many predicted would burn itself out is still in full flow despite the end of the stamp duty holiday.

“While on the front line we’re seeing some asking prices being reduced as the market begins to normalise, monthly price growth in October actually accelerated, doing the exact opposite of what might have been expected after the end of the chancellor’s tax incentives.

“The white heat of price inflation seen for much of this year is still creating sleepless nights in Threadneedle St.

“Money markets are increasingly bringing forward their predictions of rate rises but even if a string of small adjustments do happen, loss of price momentum is likely to still be gradual. In most areas it will be a case of things ‘calming down’ rather than ‘going down’.

“There are still thousands of would-be buyers and the market remains broadly in good health but an increasing number of house hunters are starting to find they have the will, if not quite the way, to buy.”


Lucy Pendleton, property expert at independent estate agents James Pendleton, said: “The market remains solid because there are still plenty of reasons to buy now rather than wait.

“We may be a month on from the end of the stamp duty tax break but a near-certain string of interest rate rises over the next 18 months is proving to be a far more powerful motivation to transact than the stamp duty holiday ever was.

“Concerns over rising inflation have eclipsed the handout as a key driver of demand and you don’t have to be a genius to figure out that locking in an attractive 10-year mortgage rate now may be the best financial decision you ever make. First-time buyers are particularly eager to do so. Having only ever known rock-bottom interest rates, there’s a little fear of the unknown incentivising them to act quickly now.

“Buyers are also always reluctant to hold out for a softening in prices that may never appear and that’s shining through in behaviour on the doorstep at the moment. The old investment adage still holds true. It’s time in the market, not timing the market that matters over the long run.

“Waiting for prices to dip 5% means you may be waiting for a day that never arrives. That applies nationally, let alone in London where price growth has been more subdued since the start of the pandemic. Buyers would be foolish to try it in the capital against a backdrop of an overhyped exodus that now looks more like an extended holiday for many than a migration.”


Anthony Codling of Twindig commented: “The house price index from the Nationwide shows that there is still life in the UK housing market after the end of the stamp duty holiday.

“Average house prices rose by almost £1,600 in October suggesting that fears of a stamp duty cliff were unfounded. Stock levels remain constrained and mortgage approvals above normal levels and whilst this remains the case further house price growth is likely, in our view.”

“The Nationwide agrees with us that the impact of any change in mortgage rates will be muted initially due to the very high numbers of those with fixed-rate mortgages, for whom there will be no change in monthly mortgage payments during the fixed term, a welcome relief as other living costs rise.”

Homesearch EOS

Email the story to a friend

Comments are closed.

Thank you for signing up to our newsletter, we have sent you an email asking you to confirm your subscription. Additionally if you would like to create a free EYE account which allows you to comment on news stories and manage your email subscriptions please enter a password below.